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Q3: Bonds Payable. (50 points total, please write down the details for partial credits) MD Company issued $600,000 of 10%, 20-year bonds on 1, 2017,
Q3: Bonds Payable. (50 points total, please write down the details for partial credits) MD Company issued $600,000 of 10%, 20-year bonds on 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. MD company uses the straight-line method of amortization for bond premium or discount. The bonds are callable at 101 (i.e., at 101% of face amount) and on January 1, 2020, MD called all the bonds and redeemed them. Instructions: Prepare the journal entries to record the following: (a) The issuance of the bonds (20 points) (b) The payment of interest and related amortization on July 1, 2017.(10 points) (c) The accrual of interest and the related amortization on December 31, 2017(10 points) (d) The redemption on January 1, 2020. (10 points)
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